Merck (MSD) accelerates with a $700M boost for its cancer ADC drug

Merck & Co (MSD) secured $700 million from Blackstone Life Sciences to accelerate the Phase III development of sacituzumab tirumotecan (sac-TMT), an experimental antibody-drug conjugate (ADC) targeting a wide range of cancers.

Why it matters: Sac-TMT could become a key weapon in MSD’s oncology pipeline and a competitor to Gilead’s Trodelvy in the booming ADC space; a field generating multi-billion dollar deals and reshaping cancer treatment.

Backstory: Sac-TMT, originally developed by China-based Kelun-Biotech, targets TROP2, a protein found on many cancer cells. MSD acquired ex-China rights in 2022 for up to $1.4B and is testing the drug in 15 global Phase III trials across six tumor types. Blackstone’s investment will help fund development through 2026. In return, it will earn royalties if sac-TMT is approved, starting with triple-negative breast cancer (TNBC).

Big picture: MSD is betting big on the modality despite having no approved ADCs yet. It now has five ADC candidates, including co-developments with Daiichi Sankyo. The sac-TMT deal adds to a wave of cross-border partnerships and major investments in ADC innovation, with Pfizer’s $43B Seagen buyout having set the pace in 2023.

Zoom in: Sac-TMT has already shown positive results in Chinese and global trials. China’s drug regulator has approved sac-TMT for TNBC, marking it as Gilead’s first real competition for Trodelvy in that market.

What’s next: The heat remains high for ADCS as recent deals include Boehringer Ingelheim’s licensing deal with Synaffix ($1.3B), Taiho’s acquisition of Araris ($1.14B), and GSK’s purchase of an asset from Syndivia ($357M).